Three Recent Updates

Customer-Suit Exception Not Applicable to Method Claims, Rules EDTX

In Near Field Electronics, LLC v. Enterprise Holdings, LLC, No. 4:25-CV-665-RWS (E.D. Tex. July 31, 2026), the U.S. District Court for the Eastern District of Texas denied multiple defendants’ motions to stay patent infringement suits under the “customer-suit exception”—a doctrine that ordinarily allows a court to pause litigation against a manufacturer’s customers when the manufacturer itself is separately litigating the same patent dispute, on the theory that a single resolution at the manufacturer level can efficiently dispose of the customer-level cases as well. Here, the court held the exception did not apply because the patent holder asserted only method claims (covering how the accused devices are used rather than how they are made) meaning a ruling for or against the device manufacturers (Verifone and Ingenico) in their parallel declaratory judgment actions would not resolve whether each customer independently infringed through its own particular use of the payment terminals. The court further found that the traditional stay factors weighed against a stay, emphasizing the plaintiff’s right to timely enforcement of its patents and the fact that the central infringement question, how each customer operated the accused technology, would persist regardless of the manufacturers’ separate proceedings. For companies involved in or monitoring the growing wave of patent infringement MDLs, particularly those featuring method-claim allegations against end users of widely distributed technology, this ruling signals that customer-defendants should not assume a supplier’s declaratory judgment action will shield them from simultaneous litigation, especially where the alleged infringement turns on the customer’s own conduct rather than the product’s design. The decision underscores the importance of early, independent case strategy for downstream parties in multi-defendant patent campaigns, as courts may decline to consolidate or stay proceedings even when a common supplier is actively contesting the same patents elsewhere.

Advice-of-Counsel Defense Does Not Necessarily Waive Privilege  

Identifying the attorney who made a decision is not the same as revealing what that attorney advised, and only the latter waives privilege. That is the takeaway from Promptu Systems Corporation v. Comcast Corporation, No. 16-6516 (E.D. Pa. Aug. 3, 2026), where the U.S. District Court for the Eastern District of Pennsylvania denied a motion to compel, rejecting an argument that a party had waived privilege by invoking an advice-of-counsel theme in its summary judgment briefing. In doing so, the court drew a clean line between identifying a decision-maker and disclosing the substance of privileged communications. As the court explained, while the party may have identified its counsel as the responsible decisionmaker, it did not attempt to defend against the inequitable conduct counterclaim by disclosing or describing an attorney-client communication or by describing the advice.

This is a reminder that an implied waiver turns on the disclosure of content, not on the mere mention of counsel’s involvement. A party may attribute a prosecution decision to its attorneys, or explain that it relied on counsel to manage a disclosure obligation, without surrendering the privilege so long as it does not reveal or characterize what the lawyer actually said. Litigators asserting inequitable conduct should therefore probe whether the opposing party has affirmatively injected the substance of legal advice into the case, since only that step opens the door to the privileged materials.

WDTX Court Dismisses Bare-Bones Infringement Allegations

A claim chart that merely parrots the claim language and adds product photos does not state a plausible infringement claim. That is the holding in Interactive Content Engines, LLC v. Apple Inc., No. MO:25-CV-00353-DC (W.D. Tex. Aug. 5, 2026) (Counts, J.), where the U.S. District Court for the Western District of Texas granted Apple’s Rule 12(b)(6) motion and dismissed the plaintiff’s direct infringement claims without prejudice. The court found that ICE’s complaint rested on claim charts that restated the limitation language without the factual content needed to make infringement plausible.

Applying the Twombly/Iqbal standard as adapted to patent pleadings, the court explained that a plaintiff must plead facts that plausibly suggest that the accused product meets each limitation of the asserted claim or claims. The court then held dismissal is warranted where the plaintiff merely recites that the defendant infringes a claim limitation but fails to identify the parts of the allegedly infringing instrumentality that perform the limitation or allege how the identified parts meet the text of the limitation. For patent plaintiffs, the decision is a cautionary tale about treating claim charts as a substitute for factual allegations. A chart earns its keep only when it maps specific, identified components of the accused product to each limitation and explains how those components satisfy the claim language; pasting the limitation into the right-hand column and attaching a photograph does not.

Three Developments We’re Monitoring 

How Do Cyberattacks Affect Trade Secret Protection?

As cyberattacks grow in frequency and sophistication, companies face mounting pressure to demonstrate that their trade secrets remain legally protectable even after a breach — yet case law directly addressing whether trade secret protection survives exfiltration and dark web exposure remains remarkably scarce, making this an area every IP practitioner should be watching closely. That scarcity does not mean companies are without guidance: under the Defend Trade Secrets Act and its state-law counterparts, the “reasonable measures” inquiry remains the linchpin, and courts will almost certainly look to the full spectrum of a company’s pre-attack posture (e.g., robust access controls, encryption, employee training, written confidentiality policies, and a tested incident response plan) when evaluating whether trade secret status was maintained at the time of the theft. Equally important are the steps taken after a breach is discovered, including prompt forensic investigation, timely notification to affected parties and law enforcement, and thorough documentation of the safeguards that were in place before the attack, all of which can rebut an adversary’s argument that the information lost its protected status once it surfaced on the dark web. While no appellate decision has squarely held that dark web publication extinguishes trade secret protection, analogous decisions, such as those addressing whether inadvertent or compelled disclosures destroy secrecy, suggest that courts will weigh the totality of the circumstances, including the owner’s diligence both before and after the breach, rather than treating unauthorized exposure as an automatic forfeiture of rights. For a deeper dive into these and other emerging IP issues, IP group partners Jesse Snyder and Angela Tarasi will be speaking at the 13th Annual Cybersecurity & Privacy Summit and we encourage you to attend.

For questions or to attend this event, contact the K&S Events Team. 

Changes to USPTO Fee Structure

Effective August 13, 2026, the USPTO once again adjusts the fee schedule associated with patent prosecution. Notably, the rule does not raise any dollar amounts. The petition fee under 37 C.F.R. § 1.17(m)(1) stays at $3,000 for a large entity, $1,200 for a small entity, and $600 for a micro entity. What changed is the condition that triggers that fee: the higher rate now applies whenever a covered petition is filed more than one year after the required action was due, cutting the prior two-year threshold in half. Compounding the cost, the USPTO now also requires additional information establishing that the entire delay was unintentional whenever such a petition is filed beyond that same one-year mark, again down from two years.

This latest move follows the sweeping fee overhaul the Office rolled out on January 19, 2025, which adjusted 433 patent fees and introduced 52 entirely new ones. That 2025 rule created the Continuing Application Fee under 37 C.F.R. § 1.17(w), imposing an added $2,700 on continuing applications filed more than six years after their earliest benefit date and $4,000 when filed more than nine years out. It also introduced tiered Information Disclosure Statement (IDS) size fees of $200, $500, and $800 keyed to cumulative reference counts exceeding 50, 100, and 200 items, on top of a base IDS filing fee that rose to $280. Read together, the 2025 continuation and IDS surcharges and the 2026 petition-fee trigger reflect a consistent theme: the USPTO is steadily pricing in the cost of delay and rewarding early, disciplined action by applicants and their counsel. K&S will continue to monitor changes at the USPTO to keep you informed.

Government Invocation of State Secrets Privilege Leads to Patent and Copyright Case Dismissal

The state secrets privilege can do more than exclude a document here or there; it can end a case entirely as it recently did in Geospatial Technology Associates, LLC v. United States, No. 1-16-cv-00346 (Fed. Cl. Aug. 3, 2026), where the U.S. Court of Federal Claims dismissed a patent and copyright owner’s suit against the government after the privilege swept too much evidence off the table for the government to mount a fair defense. Over several years of pretrial motion practice, the court struck or precluded scores of documents, expert opinions, and deposition passages that ran afoul of the privileged categories, including the plaintiff’s damages report across three successive iterations. On the eve of trial, the government moved to dismiss, and the court granted the motion, concluding that the case simply could not be litigated further consistent with the privilege.

The court concluded that the proceeding “would be, on the whole, an exercise in futility due to frequent and necessary attempts to limit disclosure before it happened,” a process that would be either impossible, or without the benefit of plaintiff’s input because government counsel could not discuss the sensitive issues in the presence of the plaintiff’s counsel. Such a trial, the court warned, “would strain the bounds of due process” and would not produce a record adequate to adjudicate the parties’ rights over the plaintiff’s intellectual property. In the court’s words, “[m]ultiple witnesses in this case simply know too much, and the temptation and incentive to test the limits of the privilege” would risk spotlighting in a public forum “the existence of certain secret information, the mere existence of which ought not be disclosed.”

While this opinion is labeled non-precedential, it is a reminder that for patent owners whose inventions touch national-security applications there may be significant evidentiary hurdles. When the accused technology is classified, the privilege may deny both sides the proof they need, and courts may conclude that dismissal is the only way to protect both the secrets and the fairness of the proceeding. Practitioners weighing suit against the government under 28 U.S.C. § 1498 or otherwise should assess early whether the core facts can be litigated at all, because the state secrets privilege can convert even a strong case into one that cannot be tried.